UK unemployment claims show biggest jump in two years

The number of people without jobs and claiming unemployment benefit rose by
almost double that expected last month to reach 1.52m – its highest total
since March 2010, official figures confirmed today.

However, the total number of people out of work actually fell, according to the wider ILO measure of unemployment, which is based on a survey of Britons.

The unemployment rate for the three months to May 2011 declined by 0.1pc on the quarter to 7.7pc. The number of unemployed people fell by 26,000 over the quarter to reach 2.45m, with more young people aged 16 to 24 entering study or finding work.

The discrepancy in the figures from the Office for National Statistics is thought to be down to changes in the way benefits are calculated. The Government is moving thousands of single mothers off income support onto unemployment benefits, known as Jobseeker's Allowance.

The ONS said the number of people out of work for up to one year increased by 11,000 over the quarter to reach 1.64m. Long-term unemployment fell by 37,000 to reach 807,000, the figures showed.

The claimant count rose by 24,500 in June compared to May – far more than the 15,000 analysts had predicted. The number of women claimants rose by 9,500 to reach 493,900, the highest figure since August 1996.

The statistics showed some signs that the private sector labour market was able to create jobs. The number of people in employment increased by 50,000 on the quarter and by 309,000 on the year to reach 29.28m. However, this is still almost 300,000 jobs below the pre-recession peak of 29.57m.

Part-time work has become a reality for more Britons who cannot find full-time jobs, the statistics showed, with 80,000 more people working part-time in the three months to May to reach 1.25m – the highest figure since records began in 1992.

Pay growth remained subdued, which is thought to be one of the reasons why employment may have risen. In the three months to May, annual pay growth excluding bonuses was 2.1pc, up from 2pc in the quarter to April. The levels of pay growth are still way below inflation, which was 4.2pc in June on the Consumer Prices Index.

Employment minister Chris Grayling said: "There continues to be some encouraging signs in the labour market figures, particularly with the continued rise in private sector employment.

"However, we do not underestimate the scale of the challenge that we face to help people into employment. We always said that the road to recovery would be choppy."

He said the Government's new Work Programme - which enlists the help of the private sector to get people off benefits and back to work - would offer "tailored" support to jobless Britains.

Today's figures showed an increase of 121,000 in the number of jobs in the UK to 31.35m. The sector with the biggest increase was information and communication.

But economists still forecast a rise in unemployment over the next year. Howard Archer, chief economist at IHS Global Insight, said the jobless total could reach 2.6m in 2012, taking the unemployment rate to 8.3pc.

He said: "With the economy going through a very soft patch, the growth outlook muted and increasing job cuts on the way in the public sector, we strongly suspect that unemployment is headed up over the coming months."